Personnel Today Awards 2008: Chiumento Award for Reward and Recognition

The award


Entrants have demonstrated how they use reward and recognition in a strategic way, aligned to their organisational objectives. They showed how their reward and recognition policy relates to specific market and competitive pressures, how they maximise staff appreciation of the package, and how they measure its impact.


The sponsor


CELRE is the UK’s leading independent publisher of salary and benefits surveys. It provides salary and benefits data on IT staff for hundreds of top companies, as well as surveys in a range of sectors.


The judge


Charles Cotton is a reward adviser, Chartered Institute of Personnel and Development (CIPD). He has worked with some of the UK’s leading private, public and voluntary sector organisations to create a range of good practice reward products and diagnostic tools for HR practitioners. He manages the CIPD’s annual reward survey. His areas of expertise include pensions, flexible benefits, short- and long-term incentives, performance-based pay, reward, communication and education.


The shortlist


Bombardier


The team: HR business services – UK, Nordic and central Europe region
Number in team: 40 Number of staff the team is responsible for: 10,300


About the organisation


Bombardier provides transport solutions from manufacturing, refurbishing and servicing trains to developing rail signal control systems. It has a traditional blue-collar workforce employed across multiple UK locations.


The challenge


To inspire employees in a manufacturing environment to become interested in their total reward and benefits package, moving the focus away from basic pay, while ensuring that the range of benefits were relevant to all kinds of people’s lifestyles.


What the organisation did




  • Introduced the Preference brand following focus groups, initially using paper and online selection methods.


  • Issued total reward statements to all employees, including prospective ones, to support the annual pay negotiations and the recruitment strategy.


  • Transferred the scheme online with computer access on-site and added benefits to suit a wide range of people.

Benefits and achievements




  • In 2008, 81% of the workforce (up from 74% in 2007) made at least one flexible benefit selection


  • Employees now have more flexibility to take benefits or cash options


  • Benefits support work-life balance, wellbeing, employee engagement, environmental issues, savings and parental needs


  • Retention rate and voluntary leaver rate reduced by 4%


  • Employees can access their statements and check their selections at any time


  • Trade union support for the communication of the benefits to members.

The judge says:


“The introduction of a flexible benefit scheme to create a more systematic and integrated benefit offering has been a success, with a high benefit take-up coinciding with a fall in the level of employee turnover. By launching a total reward statement, employees can appreciate the benefit spend and look beyond just their pay packet.


First Direct


The team: Reward and recognition team, people experience department
Number in team: 4 Number of staff the team is responsible for: 3,493


About the organisation


The bank has 1.2 million customers and offers many services including online banking, insurance, mortgages, investments and share dealing with 43% of sales via electronic channels. It operates from Leeds and Glasgow.


The challenge


The new CEO introduced a new mission statement and values that required a change in behaviours through an advanced recognition culture.


What the organisation did




  • Conducted an employee survey which identified that employees would be more engaged if they felt more valued. Those departments with high recognition scores were asked to disseminate best practice


  • Created a new language for recognition with visible totems and tools presented to team leaders and managers in a masterclass presented by an external expert


  • Awards dinner and long-service awards were revamped and an online Thank You site was created, offering cards and small gifts


  • Introduced awards for employees, voted by them, such as recognising giving and people leaders.

Benefits and achievements




  • Thank You site now receives about 1,900 entries a month from people appreciating their colleagues


  • More than 400 Thank You cards are sent every month


  • Very positive feedback from revamp of long service award


  • Employee survey found recognition had improved from 68% in 2006 to 76% in 2007.

The judge says:


“HR came up with a new recognition programme including cards specially designed for staff to use to thank colleagues and, so that managers could recognise employees for small things, cards that entitled employees to a treat, such as a Costa and a bun. More employees are now recognising the contribution of their colleagues.”


Innospec


The team: HR department
Number in team: 6 Number of staff the team is responsible for: 800


About the organisation


Innospec is a speciality chemicals manufacturer with sites and sales operations all over the world. Its mission is to create a focused and profitable speciality chemicals business that is growing organically and through strategic acquisition.


The challenge


To support the transformation of the company from a single product, UK manufacturing business into a dynamic, customer-focused, technical sales organisation by developing a performance culture that rewards the delivery of results and recognises employees’ contribution.


What the organisation did




  • Introduced a ‘pay for performance’ approach to all staff, linking reward to individual and team performance


  • Created a simplified pay and grading structure to give managers greater flexibility and a performance review process to identify top performers


  • Developed innovative ways to recognise the contribution of employees, including granting 200 free share options for all employees, with new starters receiving 100 share options, and top performers being recognised by the chief executive with a trip to New York.

Benefits and achievements




  • Strong link between performance and increased shareholder value


  • Universal buy-in and support from business managers


  • Redesigned sales incentives seen as a valuable tool for driving and rewarding profitable growth


  • Many individuals and teams exceeded set targets


  • Results for 2007 surpassed expectations with profit up 50% to $48m (£24m)


  • High employee engagement, with 70% happy with the rewards they receive, and 84% proud to work for the company.

The judge says:


“The creation of a new pay structure, a performance-based pay progression process, and giving free share options to all staff to recognise their collective contribution has increased sales, profits and employee satisfaction.”


Thorntons


The team: Retail HR
Number in team: 6 Number of staff the team is responsible for: 2,600


About the organisation


Thorntons is a retailer and manufacturer of confectionery products. It has about 380 shops and 220 franchises and also sells through supermarkets and its website.


The challenge Increasing labour turnover due to uncompetitive rates of pay and contract hours were having an impact on sales performance and leading to higher numbers of customer complaints. To address this, while achieving a return on investment, the company modernised the terms and conditions of its retail staff, including incentives to align them with the company objectives.


What the organisation did




  • Invested an extra £2m in the retail payroll budget


  • Benchmarked pay against competitors


  • Linked individual pay to actual sales turnover and defined performance criteria in consultation with the works council. This took into account existing bonuses, incentives and terms and conditions


  • Communicated changes via 13 nationwide area briefings in two weeks with back-up documentation


  • Carried out additional employee survey to measure store teams’ satisfaction with solution.

Benefits and achievements:




  • Store manager turnover was reduced by 43%, and overall labour turnover dropped by 16%


  • The number of customer complaints declined by 25%


  • Three in five employees said their salary was fair for their responsibilities, compared with 16% in a previous satisfaction survey, and motivation levels are now at 62%


  • Absence has fallen by 27%.

The judge says:


“HR gained board approval to invest a significant amount of money in enhancing the firm’s reward offering and improving the link between pay and performance. These initiatives have resulted in falling rates of employee turnover, improved retention of good performers and a fall in customer complaints.”


Wolseley UK


The team: human resources
Number in team: 110 Number of staff the team is responsible for: 15,000


About the organisation


Builders merchant Wolseley UK has a network of more than 1,800 branches serviced by three regional distribution centres situated at Ripon, Worcester and Milton Keynes.


The challenge


More than 6,000 non-management employees had no grading or pay structure in 2006, and there were significant differences in pay for employees doing the same job. Only one in four workers were satisfied with their pay and benefits, according to the employee opinion survey that year. There was high staff turnover and low performance, and engagement was seriously affected.


What the organisation did


The company introduced a clear pay and grading structure with a transparent structure for job roles and core skills. It:




  • Benchmarked salary across the industry and consulted line managers to define roles and competences


  • Designed a pay and grading structure to demonstrate pay and career progression


  • Trained line managers in an employee assessment process


  • Communicated the new structure in face-to-face briefings and online Q&A chat sessions.

Benefits and achievements:




  • Some 6,000 employees have a pay and grading structure with defined job roles


  • There is now a reward system in place for increasing responsibility and gaining new skills and knowledge and a career workbook shows employees what they need to achieve to improve pay


  • The results of the 2007 employee survey indicated that overall satisfaction with pay had increased by 11%. A telephone survey following implementation found more than 80% agreed that structure is easy to understand


  • Staff turnover is showing early signs of reducing.

The judge says:


“HR has set about creating a pay structure. Central to the change initiative was HR working alongside line managers to define job roles and the competencies that are now needed by the business.”

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